Trend #003 - 2023 Predictions 🔮 | 2022 Year in Review

Hey,

Every other Friday, I will send you a trend alert to make you the smartest person in the room about all things startup.

Today, we are going to make some lofty predictions for 2023. 🔍

What you will learn:

• What 2 things we were dead wrong about in 2022?

• What's one business model that blew up in 2022?

• What do we think about ChatGPT in 2023?

• An Interesting take on rising interest rates.

• Why is the Creator Economy a problem?

• 10 Predictions for indie entrepreneurs in 2023?

• Brainstorm new business opportunities in this space.

Buckle in and let’s get started. 👇

What's happening in Hazel's world?

The highlight over the last 2 weeks (aside from Christmas of course) was definitely meeting some of the lovely people from Twitter-sphere in real life! 

2022 was a year of change. I've launched and failed multiple businesses, had a baby, made many life & career pivots and met many wonderful people from all corners of the world. 2023 will be a great year. I can feel it. 🔥

Ok, enough about me, let's back to startup trends 👇

👀 2022's hits and misses

Most people don't bother reviewing their historical predictions (Equity analysts, I am looking right at you!). But you should absolutely be obsessed with tracking your predictive hit rates in the game of start-ups. 

So, let’s start with 2022.

Who predicted what for 2022 and how accurate were they?

Key: (🟢 Spot On! | 🟠 Kind of | 🔴 Completely off!)

🟠  The Great Resignation - The media hyped it up as a record year of resignations. In reality, “only” around 4m people left their jobs every month in 2022, which wasn’t all that different to 2021. 🤷

🔴  Crypto rush - We started the year with Bitcoin priced at $48k. Most people believed it will continue to go up. At the end of the year, Bitcoin is worth $17k. 📉 Another miss.

🟢  Million dollar one person business - My First Million predicted the rise of these types of zero-employee businesses. With new no-code tools like Typedream, you can now literally launch a mini business in a weekend.

🟠 Inflation - When governments started dishing out bail-out funds, we knew this would happen. However, most of us still got caught off guard in 2022 when inflation finally hits our pockets. 2023 will be another painful year.

🟢  Reverse globalization - Bank of America predicted companies will start “reshoring” operations. Well, Russia invaded Ukraine and the rest is history.

🟢  VC funding cools - Yes. Free money is harder to come by. If you’re looking to sell your indie startup you’re now more likely to meet with a lower-ticket private equity deal hunter. Learn more about deal valuation here and why SAAS valuation is falling here.

🟢  Automations boom - Absolutely. And ChatGPT kicked this up a notch in November when they launched and reached 1 million users in 6 days.

🔴 NFT - NFT? What NFT? The same goes for the Metaverse. I think we missed the mark on these two.

What are the learnings here? →

Things are almost never as sensational as the headlines make them out to be. Be wary when EVERYONE is talking about something and be optimistic when EVERYONE is condemning something.

Last year, everyone was excited about NFTs, Crypto and the great resignation.

This year, it's all about ChatGPT and AI. 

Will there be opportunities in ChatGPT and AI? Of course! But will they take over our jobs in 2023? Unlikely. If you are launching something with AI, be prepared for it to take 10x as long as you think for the market to adopt your solution. 

Want more AI ideas? Read last week's issue on "How to profit from the AI hype".

🔥 2023 Start-up Trends Predictions

A new economic environment means new opportunities. Thankfully in 2023, there are plenty. Here are my top 10 predictions for 2023:

1. Gamification of personal savings 💰

Higher interest rates create opportunities for banks and startups to come up with novel ways of saving. One of the biggest savings lottery schemes in the world is the UK premium bonds, but we will see more popping up in 2023.

2. Cost-busting activities 💸

It's pretty amazing how little our spending habits have been impacted so far by inflation (I've used search volumes for terms like "meal prep" and "budget travel" as proxies). This is why lifestyle inflation is a problem!  I do think the tide will turn in the coming months once we realize how expensive things have suddenly become.

2. More side projects 🦄

Recession is looming and the cost of living is skyrocketing. More people will be looking for get-rich-quick schemes and quick money-making opportunities to supplement their income.

These $0-$1m attempts never get old. 😂

3. More no-code tools & agencies 🛠

For the dreamers and doers, this means starting a business. No-code tools like Typedream, Softr and Gumroad are it easier for people to start a project. This means opportunities to create tools and agencies that make this process easier.

4. Influence becomes decentralized 🐤

The TikTok algorithm allows ANYONE to "blow up" on the platform, even if you don't have a big following. This forces other platforms to adapt their algorithm (YouTube Shorts, Instagram Reels, LinkedIn and Twitter...) More people will self-identify as creators.

5. Distribution is king in a Creator Economy  ✍️

More creators and more AI content will lead to an explosion of content. Content becomes cheap whereas curation & distribution becomes valuable - think newsletters (like this one!) and communities (Discord, chat groups) that help you achieve something specific, like starting a business or getting out of debt. 

6. Ads go native 🤠

Marketers are constantly trying to improve the performance of their campaigns. In 2023, this means more UGC (user-generated content) and more collaboration with creators that make ads appear native on the platforms.

7. Old habits die hard (unless they retire) ⚡️

Boomers are retiring and Gen Zs (those born in the late 1990s) are entering the workplace, bringing with them new ways of working. That means SAAS opportunities for productivity tools, presentation aids and networking events to thrive. 

8. Nostalgia website design 🧑‍💻

Did you notice Y2K-style website design is making a come-back? Read this report from Webflow if you're looking to build or refresh your website in 2023.

9. Global economic equalizer

This is more of a long-term trend and it will take a decade for us to see the effects. Remote working and the reduction in startup costs will level the playing field for entrepreneurship. Living in Vietnam but want to launch a startup? No problem.

Check out these profiles for some remote working inspiration - Daniel Nguyen, Minh-Phuc Tran, Pieter Levels and Sveta Bay

10. More venture studio activities

M&A (Mergers & Acquisitions) activities are getting hot in the lower ticket space because 1) Sophisticated buyers are eyeing up smaller deals, and 2) platforms like microacquire.com are professionalizing the little businesses.

Whether you are "buying to build" or "building to sell", the market is ready for you. Read this thread about venture studios.

👁 2023 - The Big Picture 

2023 is the year we will see high levels of inflation, soaring interest rates (the first time Millennials have seen rates like these), and stunted productivity. 

If you are fundraising, be prepared for investors to expect bigger and faster returns for their money. You're competing against the 5-6% ROI that VCs can get just by locking money away at a bank and earning interest. 🤷

If you're starting a product business, be sure to factor in bigger margins to cover higher product & labor costs of production.

In general, customers may be starting to feel the pinch but it will still take a while for customer behavior to adjust.

Was this email useful?

My entire purpose in creating these emails are to highlight unusual opportunities for you to find your next big business idea. 

I hope it's doing that. If it is, let me know by replying. 

Until the next one, 

Hazel

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